Bingo Software Developers Sold for £36 million

Playtech said on Monday that it would pay an initial £29 million in cash, with an extra £7 million in the first four months of 2011 depending on Virtue Fusion performance in 2010.

Bingo is widely recognised as one of the fastest growing sectors in the online gaming market and Playtech anticipate the deal will be earnings accretive in 2010. The acquisition gives Playtech some excellent cross-selling opportunities.

Playtech Chief Executive Mor Weizer said in a statement that online bingo had found early favour with regulators.

"We see this acquisition as not only furthering what is already Playtech's competitive advantage in the growing online gaming market as a whole, but as having the potential to generate meaningful opportunities in newly regulated markets," Weizer said.

Virtue Fusion already has in excess of 20 bingo licensees on the Internet, including well known brands such as William Hill, Ladbrokes and Paddy Power. The business had a turnover of 12.3 million pounds and adjusted earnings before interest tax depreciation and amortisation of 3.8 million pounds in 2009.

A blend of industry growth, a good trading position at the end of January, and some sharp partnerships and acquisitions has helped raise Playtech's shares by 21 percent in the last three months, said Daniel Stewart analyst James Hollins.

The broker has a "buy" recommendation on the stock and raised its target price on Playtech to 625 pence from 602 pence.